My thoughts on Healthcare reform

I've been watching the politicians talk about 'reforming' healthcare and reading what some friends have been saying on facebook, and I've been getting somewhat frustrated. I don't think the politicans care about reform- they only seem to want to place the federal government in charge of healthcare, and the only reason I can see for that is control.

As for the discussions between my friends, I am noticing a few false arguments, IMO. First, one friend mentioned that the conventional wisdom is that doctors get paid too much. I think it's more that doctors' offices charge too much, and that is more a result of high malpractice insurance premiums, administrative costs to file insurance paperwork and other costs of dealing with insurance companies or the government. I know many doctors offices that have to hire more than one person to file insurance paperwork and appeals. And the 'deals' that insurance companies make with those offices as to how much they will pay, in order for the doctors to be included in the 'in network' list of doctors, aren't very good deals. The Medicare and Medicaid reimbursement deals from the government are even worse- usually below the cost of providing services. In order to make that up, the doctors offices have to charge those not with Medicare or Medicaid, see more patients and find other ways to get money, such as charging copy costs for records. This is more true for hospitals, who cannot choose not to accept Medicare and Medicaid patients, and who must treat everyone regardless of ability to pay. They have to make up the costs elsewhere.

I was really troubled when one friend said that he doesn't understand how universal healthcare takes away freedom from anyone. I think that, anytime anyone other than the doctor and patient make healthcare decisions, freedom is taken away from the patient, and to a degree, from the doctor. The same is true with HMO health insurance plans. I personally will never take an HMO plan, as I want the freedom to choose my doctors. Currently, a large portion of my medical care is not covered by my health insurance plan, and I choose to continue that care, and pay for it myself. I don't think health insurance should determine what care is given- it should just be a tool to help pay for larger unexpected expenses. And healthcare decisions should not be made by bureaucrats anywhere, whether in an HMO or in the government. The stimulus bill included a department of Health Information Technology, whose purpose is to consolidate all medical records in one database and make decisions about healthcare nationwide based on efficiency. I think this should scare anyone who has even a cold, much less other health issues.

As to the argument that we give up freedom for fire protection, so why not for healthcare, I say that fire protection is a local issue, determined on a local level, by local taxes (albeit subsidized by the federal government), and as with the case of my friend who lives in a district with a volunteer fire department, is different based on where one chooses to live. Everyone can vote with their feet as to what level of taxes they want to pay for fire protection, and what level they want. However, with universal healthcare, the taxes are on a federal level, not local, and there is no way to leave, other than leaving the country, which is not an option of many people.

My thoughts on health care reform:
1) Health insurance needs to be Health Insurance- the discussions about healthcare seem to confuse healthcare with health insurance. Insurance is a tool for risk management- the basic principle is to pay a premium to insure that when larger events come along, the majority of the amount will be paid by the insurance company. Insurance is never intended to pay for everything- it should only pay for covered losses, and for items that are possibilities, not known events. And if insurance is used for small items, the premiums will necessarily increase. Pricing is therefore based on the probability of unknown events happening. One option for health insurance would be similar to catastrophe insurance, and would only pay out in the event of hospitalization or serious illness. Higher premiums would allow for lower deductibles, and could cover prescriptions, etc.

2) One of the largest costs doctors pay, is malpractice insurance. In some locations malpractice insurance costs are so high that doctors are choosing to either stop practicing medicine, or moving elsewhere. Tort reform would reduce the costs of malpractice insurance.

3) Government regulation greatly increases the cost of insurance. Because of lobbying, certain groups have ensured that their specialties will be included in all insurance plans, regardless of whether or not the insured wants to pay the premiums for that coverage. For instance, if I knew I couldn't have children, why should I pay for coverage that includes pregnancy care? If I don't want to pay for substance abuse care, why can't I exclude that from my plan? The premiums for plans that do include such coverages would have to account for more adverse selection, as, for example, those with plans to have children would choose pregnancy coverages. However, if I were to get pregnant, I would have to pay for the care myself. Because fewer people would have comprehensive insurance plans, doctors would need fewer people to process claims and appeals.

4) Possibly the most important reform is to separate health insurance from the employer. Employers receive tax benefits for providing health insurance to employees, and individuals do not receive the same tax benefits for obtaining health insurance on their own. In addition, if you work for a large company, you will get a better insurance plan than if you work for a small company, due the the larger pool of participants, and if you work for yourself or for a really small company, you may not even have the option of employer provided insurance, and if you lose your job, you lose that coverage. Insurance should not be tied to employment- to remove it from employment would level the playing field for everyone.

5) a great point from a friend, so I'm co-opting it: ensure that emergency rooms are used for true emergencies, not in place of doctors visits. Not sure the best way to accomplish this, although Urgent Care centers seem to help.